Experts advise brewers on product recall liability

A recent spate of product recalls has prompted experts to highlight the need for breweries to be prepared for when things go wrong.

While the craft brewing movement has been driven by brewers pushing limits, experts warn that brewers must remember they are food manufacturers and are therefore liable for the products they produce.

Fiona Fleming, Managing Director at the Australian Institute of Food Science and Technology, said that all food manufacturers have a responsibility to produce and supply food that is “safe” and “suitable”.

Fleming advised Brews News that failure to provide safe and suitable food can result in a manufacturer having to conduct a product recall. She warns that breweries may be fined or even closed down if a breach is serious enough.

Fleming said that implementing a food safety program in a brewery will assist in ensuring food safety incidents do not occur. She cites HACCP – the Hazard Analysis and Critical Control Points – as the most widely known food safety system.

Fleming said that brewers must treat food safety seriously, understand the regulations and requirements that apply to their businesses and implement processes and procedures to ensure that they are compliant.

Lawyer Amelia Edwards, a Senior Associate at KHQ Lawyers, is a commercial compliance specialist and coordinates the KHQ Food and Beverage team.

Edwards told Brews News that risks to health and safety and personal injury are the two main areas government regulators look to when considering a product recall.

Edwards explained that there are two types of product recalls, mandatory and voluntary. Mandatory recalls occur when a regulator contacts a manufacturer to conduct a recall. In this instance, Edwards said, the manufacturer is liable and must comply with provisions outlined in Australian Consumer Law, which are enforced by the Australian Competition and Consumer Commission.

“If a brewery otherwise becomes aware of circumstances that suggest that there is a risk to public health and safety and wish to rectify the issue, the brewery can conduct what is referred to as a voluntary recall,” she said.

“The only mandatory reporting obligation that is connected with a voluntary recall is in relation to serious injury and that is where Australian Consumer Law applies and the ACCC must be notified.

Food Standards Australia New Zealand is the statutory authority in the Australian Government health portfolio that deals with product recall procedures. In most cases, FSANZ will defer to the relevant state-based authority. For the most part, brewers must comply with regulations laid out in the FSANZ Code.

However, Edwards said that while its best practice for brewers to be contacting their local regulator and FSANZ directly before announcing a recall to the public, if they have gone ahead and made a public announcement, then they do need to contact FSANZ within 48 hours.

Edwards said that depending on the severity of the risk or potential risk to consumers, brewers might opt to conduct a trade product recall –where products are stopped at retail – or a consumer product recall. The latter is when consumers are notified and advised to not open the product and to return it to their local retailer for a refund.

“In most food and beverage cases, you’re usually going to be looking – if the risk is serious enough – to conduct a consumer recall,” Edwards said.

Like Fleming, Edwards encourages brewers to have some sort of food safety plan in place.

“In terms of your obligations to mitigate risks before something actually occurs, you are required to have – in most cases – a food safety plan in place.”

Edwards said that a product recall plan should ask what breweries need to consider if they find out about an incident, who is responsible within the organisation for making a decision and what does a brewery need to do once there is a risk sufficient to require a voluntary recall.

For the brewing industry, Edwards explained, co-manufacturing relationships are a key risk area. In cases where brewers co-manufacture or hand over products for distribution, they can lose control of their entire supply chain.

She said that “making sure [brewers] are covering [their] own liability by having really clear contractual terms in place,” is vital.

She added that contractual terms should include both “warranties, that your partner will comply with contractual obligations by law, as well as indemnities, if your co-manufacturer does cause issues they will be liable for the costs involved in the recall and if damages are required to be paid”.

She said that this is not required by law but is recommended as good practice.

If an incident does occur, it is up to the brewery to contact their state-based regulator and follow their recommendations. Edwards said that while regulators will help handle outgoing notifications, brewers must be sure to be consistent and clear in their message to consumers.

She warns brewers not to be misleading about the nature of the recall and also to be careful about admitting liability for any potential injuries or damages that might arise from the recall. Brewers are advised to use whatever platforms they would normally use to engage with their consumer base.

“It may not be sufficient to only contact people via social media and so you need to refer to the guidelines and to the FSANZ requirements.

Edwards said that she would always recommend that brewers consult with a lawyer if they do have a potential recall issue.